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Outpacing the Rest of the World: Latin American Business Soars in the Cloud

March 26, 2015 by Judith Magyar 0

Over 1 million demonstrators marched in cities and towns across Brazil last Sunday to protest a sluggish economy, rising prices and corruption. These marches come as Brazil struggles to overcome economic and political malaise and pick up the pieces of a boom that crumbled a few years ago. Sounds dire?

According to business experts, the best time to invest in growth is when times are tough. Companies with farsighted strategic plans that are focused on innovation are the ones that will be ahead of the game when the economy picks up. And when it comes to technology, according to IDC, the global market intelligence firm that excels in analyzing the future, Latin America will continue to outpace the global average of roughly four percent, investing US$136.3 billion in IT.

Luciano Ramos, Software Research Coordinator at IDC Brazil, sees a massive transformation sweeping across the entire region. Many enterprises are running on antiquated systems, so the current wave of new technology presents an opportunity to leapfrog technology generations. Doing business in the cloud makes the entire process simpler and more affordable.

“Almost half of the region’s technology investment is in Brazil, making this market particularly ripe for advanced technology platforms,” says Luciano.

One million opportunities

Cloud adoption is gaining traction all over the world, but it’s growing especially fast in Latin America. Companies in this region understand the benefits of doing business in the cloud; now they want to know how to use it and what to invest in.

Sandra Vaz, head of SAP Business One in Latin America, sees unlimited opportunity in the entire region but especially in Brazil, home to over one million small and mid-sized businesses. For these enterprises which range from restaurants and ice cream parlors to small farms and language schools, cloud solutions are an affordable way to manage processes, deal with finances and comply with regulations. That’s because they pay a monthly fee for services without having to invest in infrastructure.

Solutions for this segment which are usually developed with partners must meet three criteria. They must deliver end-to-end solutions for specific industry needs; they must enable customers to expand in local and global markets allowing two tier implementations, and they must provide standard solutions and best practices across all regions.

One way to expand business is to create alliances through networks. One great example is the partnership between SAP and Elavon, one of the world’s largest processors of credit card transactions. Together they created a solution called Unico to enable Elavon’s network of 50,000 customers to manage business process more efficiently, consolidate payments and ensure compliance.

Simplicity benefits companies of all sizes

SAP already has over 6,000 customers of all sizes in Brazil using a variety of cloud solutions. Arezzo & Co, the giant Brazilian footwear company for example, just announced results for 2014: a two percent growth in profit despite an increase in operating expenses. Not bad in a flat economy! This was partly the result of a strategic decision to treat their e-commerce business like a flagship store. Arezzo implemented hybris B2C Commerce, an omni-channel cloud commerce solution from SAP company hybris that provides digital and physical touch points, enabling its online business to act as a showcase for Schutz, one of its brands. This move helped strengthen loyalty, drive sales and most importantly, differentiate Arezzo from its competitors.

Cristina Palmaka, Managing Director of SAP Brazil, spoke about building a better Brazil during her opening keynote at the SAP Forum last week in São Paulo, Latin America’s largest IT event: “The best way we can contribute to growth in this country is to help businesses of all sizes simplify systems and processes, so they can run better and innovate more.”

Follow me: @magyarj

This story originally appeared on SAP Business Trends.

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